 Start-up Actions and Outcomes: What Entrepreneurs Do to Reach ProfitabilityPaul D. Reynolds Foundations and Trends(R) in Entrepreneurship, 2016, vol. 12, issue 6, 443-559 Abstract: Globally, hundreds of millions enter the firm creation process every year. About a third will actually develop a profitable new firm. Understanding how these successful efforts reach initial profits has been a major challenge for entrepreneurial scholars. A recently developed research protocol has involved systematic collection of data on the start-up activities of representative samples of nascent ventures and tracking their outcomes; a number of Panel Study of Entrepreneurial Dynamics [PSED] projects have been completed. Assembling data from five PSED cohorts in four countries has allowed for attention to the effect of start-up activities on the outcomes of a harmonized sample of 2,500 nascent ventures. There is no difference in outcomes related to the gender of the nascent entrepreneur, a small effect associated with age, and modest impacts associated with educational attainment, work history, and experience with other start-up initiatives. There is a systematic country effect; the U.S. has a lower proportion of profitable new firms than Australia, China, or Sweden. Many aspects of the start-up effort are related to the outcomes. A greater range of start-up activities early in the start-up process is associated with profitability, less terminations, and fewer with a long tenure in the start-up process. Activities emphasizing promotion of the nascent venture, assembling a firm infrastructure, and implementing a production process are associated with initial profitability and fewer terminations. Business planning increases the tendency to quit and reduces the proportion active in the start-up process. It may reduce the time to reach disengagement. Implementing of promotion, infrastructure development, and establishing a production process also reduces the time to reach initial profits. The results have implications for both aspiring entrepreneurs and policy development. Keywords: Firm creation; PSED; Nascent entrepreneurship; Business planning (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:now:fntent:0300000071 Access Statistics for this article More articles in Foundations and Trends(R) in Entrepreneurship from now publishers |
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